Financial Performance - The total revenue for the first half of 2023 was RMB 19.348 billion, down from RMB 32.604 billion in the first half of 2022[6]. - Net profit for the first half of 2023 was RMB 1.736 billion, a significant decline from RMB 8.226 billion in the same period of 2022, resulting in a net profit margin of 9.0%[6]. - Total revenue decreased by 40.7% from RMB 32,604 million for the six months ended June 30, 2022, to RMB 19,348 million for the six months ended June 30, 2023[9]. - Net profit decreased by 78.9% from RMB 8,226 million in the six months ended June 30, 2022, to RMB 1,736 million in the six months ended June 30, 2023[21]. - The company reported a total comprehensive income of RMB 1,059,353 thousand for the six months ended June 30, 2023, down 86.1% from RMB 7,616,620 thousand in the previous year[61]. - The company reported a total of RMB 12,153,663 thousand in remaining performance obligations for long-term contracts as of June 30, 2023, with RMB 7,682,777 thousand expected to be recognized within one year[90]. Loan and Borrowing Information - As of June 30, 2023, the loan balance was RMB 426.4 billion, a decrease of 35.5% compared to RMB 661.4 billion on June 30, 2022[6]. - The overdue rate for loans over 30 days was 5.9% as of June 30, 2023, slightly up from 5.7% on March 31, 2023[7]. - The number of cumulative borrowers increased by 8.3% to approximately 19.7 million as of June 30, 2023, compared to approximately 18.2 million a year earlier[7]. - The total amount of loans issued by consolidated trust plans decreased from RMB 186,396,992 thousand as of December 31, 2022, to RMB 135,686,487 thousand as of June 30, 2023[120]. - The company issued new loans totaling RMB 62,669,645 thousand during the first half of 2023[123]. Expenses and Cost Management - Total expenses decreased by 19.8% from RMB 21,099 million to RMB 16,920 million, driven by operational efficiency improvements[15]. - Sales and marketing expenses fell by 30.2% from RMB 7,980 million to RMB 5,570 million, influenced by reduced new loan sales and transaction volumes[15]. - General and administrative expenses decreased by 16.0% from RMB 1,487 million to RMB 1,249 million, due to lower employee costs[16]. - Operating and service expenses slightly decreased by 1.2% from RMB 3,171 million to RMB 3,134 million, reflecting cost control measures[16]. - Technology and analysis expenses reduced by 26.4% from RMB 931 million to RMB 686 million, resulting from team optimization and improved operational efficiency[16]. Cash and Liquidity - As of June 30, 2023, cash and cash equivalents amounted to RMB 46,928 million, up from RMB 42,863 million as of June 30, 2022[22]. - The company's cash and cash equivalents decreased from RMB 43,882,127 thousand as of December 31, 2022, to RMB 46,927,978 thousand as of June 30, 2023, representing an increase of 7.4%[104]. - Cash flow from operating activities for the six months ended June 30, 2023, was RMB 5,280,779 thousand, a substantial improvement from a cash outflow of RMB 2,736,994 thousand in the same period of 2022[66]. Risk Management - The company faces foreign exchange risk primarily from fluctuations in the USD/CNY exchange rate, which could impact financial performance[30]. - Interest rate risk is managed through policies that require managing the maturity dates of interest-bearing financial assets and liabilities[31]. - The group’s risk management policies have remained unchanged since December 31, 2022, focusing on minimizing potential adverse impacts on financial performance[74]. - The group regularly evaluates macroeconomic indicators, including GDP and CPI, to estimate expected credit losses, with no significant changes in forecasting methods since December 31, 2022[74]. Shareholder Information - As of June 30, 2023, the total number of issued and outstanding shares was 1,146,236,115[36]. - The company declared a semi-annual dividend of $0.078 per share or $0.039 per American Depositary Share for the six months ended June 30, 2023, to be paid in cash[53]. - The company has a total of 23,682,710 shares available for future grants under the share incentive plan, equivalent to 47,365,420 American depositary shares[44]. - The company has options granted to purchase up to 100% of shares in Lanbang Investment Company Limited and Tun Kung Company Limited[43]. Corporate Governance - The company’s board is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[35]. - The company has complied with all applicable provisions of the Corporate Governance Code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[50]. - The company plans to continue evaluating the separation of the roles of Chairman and CEO based on the overall circumstances of the group[50]. Financial Instruments and Fair Value - The company's financial instruments are classified into three levels based on fair value hierarchy, with a total of RMB 29,536,890 thousand as of June 30, 2023[80]. - The fair value estimation techniques for financial instruments have not changed significantly since December 31, 2022[78]. - The total financial assets measured at fair value and recognized in profit or loss amounted to RMB 23,174,613 thousand, a decrease of 20.4% from RMB 29,089,447 thousand as of December 31, 2022[108].

Dividend Declaration - Lufax Holding Ltd declared an interim dividend of $0.078 per ordinary share and $0.039 per American depositary share for the six months ended June 30, 2023[1]. - The interim dividend will be paid on October 24, 2023, to shareholders recorded as of October 12, 2023[1]. - The company expects to pay the semi-annual dividend to shareholders on October 24, 2023, and to American Depositary Share holders on October 30, 2023[54]. Financial Performance - The total revenue decreased by 40.7% from RMB 32,604 million for the six months ended June 30, 2022, to RMB 19,348 million for the six months ended June 30, 2023[10]. - Net profit for the first half of 2023 was RMB 1,736 million, down from RMB 8,226 million in the same period of 2022, resulting in a net profit margin of 9.0%[7]. - Net profit dropped by 78.9% from RMB 8,226 million in the first half of 2022 to RMB 1,736 million in the first half of 2023[22]. - Total revenue for Q2 2023 was RMB 9,270 million, down 39.4% from RMB 15,288 million in Q2 2022[13]. - The company reported a basic earnings per share of RMB 1.43 for the six months ended June 30, 2023, compared to RMB 7.16 for the same period in 2022, reflecting a decrease of 80%[62]. Governance and Compliance - The financial results for the six months ended June 30, 2023, were reviewed by the audit committee and the auditor, PwC[1]. - The company is committed to maintaining transparency and compliance with the Hong Kong Stock Exchange regulations regarding interim results announcements[1]. - The company emphasizes its commitment to corporate governance and compliance with legal requirements in its operations[2]. - The board of directors is committed to high standards of corporate governance, which is essential for protecting shareholder interests and enhancing corporate value[36]. - The company has complied with all applicable provisions of the Corporate Governance Code since the listing date[51]. Operational Highlights - The company is focused on expanding its market presence and enhancing its product offerings in the financial services sector[1]. - The company has established partnerships with 91 financial institutions to support its funding and credit enhancement efforts[7]. - The company aims to enhance risk management and diversify its business as part of its mid-term strategic initiatives[7]. Loan and Credit Metrics - As of June 30, 2023, the loan balance was RMB 426.4 billion, a decrease of 35.5% compared to RMB 661.4 billion as of June 30, 2022[8]. - The number of cumulative borrowers increased by 8.3% to approximately 19.7 million as of June 30, 2023, compared to approximately 18.2 million as of June 30, 2022[8]. - The overdue rate for loans over 30 days was 5.9% as of June 30, 2023, compared to 5.7% as of March 31, 2023[8]. - The consumer finance loan balance was RMB 32.8 billion as of June 30, 2023, with new consumer finance loans totaling RMB 31.8 billion in the first half of 2023[7]. Revenue Breakdown - Technology platform revenue decreased by 45.5% from RMB 16,672 million for the six months ended June 30, 2022, to RMB 9,086 million for the six months ended June 30, 2023[11]. - Net interest income fell by 32.8% from RMB 9,994 million to RMB 6,716 million during the same period, primarily due to a decrease in new loan sales and rates[11]. - Guarantee income dropped by 33.2% from RMB 3,838 million to RMB 2,565 million, attributed to a reduction in loan balances and rates[11]. - Other income decreased by 56.5% from RMB 1,236 million to RMB 538 million, due to changes in the fee structure charged to key credit enhancement partners[11]. Expense Management - Total expenses decreased by 19.8% from RMB 21,099 million to RMB 16,920 million, due to improved operational efficiency and reduced loan balances and new loan sales[16]. - Sales and marketing expenses fell by 30.2% from RMB 7,980 million to RMB 5,570 million, driven by reduced commissions from lower new loan sales[16]. - General and administrative expenses decreased by 35.3% from RMB 762 million in Q2 2022 to RMB 493 million in Q2 2023, attributed to cost control measures and reduced taxes[20]. Employee and Compensation - As of June 30, 2023, the company had a total of 50,057 full-time employees, with 36,167 in sales and marketing, 1,500 in credit assessment, and 7,483 in post-loan services[34]. - Employee benefits expenses for the six months ended June 30, 2023, were RMB 6,190 million, down from RMB 7,672 million for the same period in 2022, representing a decrease of approximately 19.4%[34]. - The company focuses on attracting and retaining qualified professionals through competitive compensation and performance-based incentives[34]. Cash Flow and Liquidity - Cash and cash equivalents increased to RMB 46,928 million as of June 30, 2023, compared to RMB 42,863 million as of June 30, 2022[23]. - Operating cash flow for the first half of 2023 was RMB 5,281 million, significantly higher than RMB 2,737 million in the same period of 2022[24]. - The company had uncollateralized bank borrowings of RMB 31,814 million as of June 30, 2023, with fixed interest rates ranging from 3.0% to 4.5%[25]. Risk Management - The company manages interest rate risk primarily from fixed-rate instruments, including bank deposits and receivables[32]. - The group’s risk management plan focuses on minimizing potential adverse impacts on financial performance due to market unpredictability[74]. - The group regularly evaluates macroeconomic indicators, including GDP and CPI, to provide optimal estimates for future credit loss provisions[75]. Shareholder Information - As of June 30, 2023, the total number of issued and outstanding shares was 1,146,236,115[37]. - The company issued convertible notes totaling $1,953.8 million to Ping An Overseas Holdings and An Technology, with 50% of the principal amount redeemed as of June 30, 2023[42]. - The share incentive plan has an authorized limit of 45,644,803 shares, with 23,682,710 shares available for future grants as of June 30, 2023[45]. Future Outlook - The company’s forward-looking statements are based on current expectations and involve known and unknown risks and uncertainties[56]. - The group expects no significant impact from the adoption of new standards effective from January 1, 2024[73].

Financial Performance - For Q1 2023, total revenue was RMB 10,078 million (approximately USD 1,467 million), a decrease of 41.8% compared to RMB 17,316 million in Q1 2022[5] - Net profit for Q1 2023 was RMB 732 million (approximately USD 107 million), down 86.2% from RMB 5,290 million in Q1 2022[6] - Total revenue for Q1 2023 was RMB 10,077,752 thousand, a decrease of 41.5% compared to RMB 17,316,096 thousand in Q1 2022[24] - Net profit for Q1 2023 was RMB 732,370 thousand, down 86.1% from RMB 5,289,881 thousand in Q1 2022[24] - The company reported a basic earnings per share of RMB 0.59 for Q1 2023, down from RMB 4.62 in Q1 2022[24] Loan and Borrower Statistics - As of March 31, 2023, the enabled loan balance was RMB 495.2 billion, a decline of 26.8% from RMB 676.3 billion as of March 31, 2022[6] - The cumulative number of borrowers increased by 9.0% to approximately 19.4 million from about 17.8 million a year earlier[7] - New enabled loans for Q1 2023 amounted to RMB 57 billion, a significant drop of 65.3% compared to RMB 164.3 billion in Q1 2022[7] - The total amount of consumer finance loans increased to RMB 29.6 billion in Q1 2023[9] - The number of customer loans decreased to RMB 183,686,063 thousand as of March 31, 2023, down from RMB 211,446,645 thousand as of December 31, 2022[25] Risk and Credit Metrics - The risk-bearing ratio for new enabled loans (excluding consumer finance subsidiaries) rose to 22.6% from 20.4% in the same period last year[7] - As of March 31, 2023, the company's risk-bearing loan balance ratio increased to 24.5% from 19.4% on March 31, 2022[8] - The 30-day overdue rate for enabled loans was 5.7% as of March 31, 2023, compared to 4.6% as of December 31, 2022[8] - The 90-day overdue rate for enabled loans was 3.3% as of March 31, 2023, up from 2.6% as of December 31, 2022[8] - Credit impairment losses increased by 10.9% to RMB 3,132 million (approximately USD 456 million) in Q1 2023 from RMB 2,824 million in Q1 2022, primarily due to deteriorating credit performance[15] Expenses and Cost Management - Total expenses for Q1 2023 were RMB 8,964 million, down 11.8% from RMB 10,163 million in Q1 2022[6] - Sales and marketing expenses decreased by 32.4% from RMB 4,484 million in Q1 2022 to RMB 3,030 million (approximately USD 441 million) in Q1 2023, due to reduced new loan sales and lower transaction volumes[15] - Total expenses decreased by 11.8% from RMB 10,163 million in Q1 2022 to RMB 8,964 million (approximately USD 1,305 million) in Q1 2023, driven mainly by a reduction in sales and marketing expenses[13] Income Sources - The company reported credit impairment losses and financing costs totaling RMB 5,685 million, a decrease of 21.5% from RMB 7,247 million in the previous year[6] - Other income/losses for Q1 2023 were RMB 3,278 million, an increase of 12.4% compared to RMB 2,916 million in Q1 2022[6] - Net interest income for Q1 2023 was RMB 3,349 million (approximately USD 488 million), a decrease of 32.8% compared to RMB 4,984 million in Q1 2022, primarily due to reduced new loan sales and lower income rates, partially offset by an increase in net interest income from the consumer finance business[12] - Guarantee income for Q1 2023 was RMB 1,417 million (approximately USD 206 million), down 25.5% from RMB 1,902 million in Q1 2022, mainly due to a decrease in loan balances and lower rates[12] - Investment income for Q1 2023 was RMB 75 million (approximately USD 11 million), compared to RMB 435 million in Q1 2022, primarily due to a decline in the fair value of risk and investment assets[12] Strategic Developments - The company emphasizes the importance of cautious investment decisions based on Q1 performance due to inherent risks and uncertainties[3] - The company aims to increase the risk-bearing ratio of newly enabled loans and diversify its product offerings to better meet customer needs[9] - The company successfully completed its listing in Hong Kong on April 14, 2023, expanding its investor base[9] - The company successfully listed on the Hong Kong Stock Exchange on April 14, 2023, with the stock code "6623" and continues to trade its American Depositary Shares on the New York Stock Exchange[19] - The company has established partnerships with over 550 financial institutions in China to provide funding and credit enhancement services for small and micro enterprises[21] Cash Flow and Assets - Operating cash flow for Q1 2023 was RMB 3,286,049 thousand, a significant improvement from a cash outflow of RMB 1,702,222 thousand in Q1 2022[27] - Cash and cash equivalents increased to RMB 32,254,754 thousand as of March 31, 2023, compared to RMB 30,941,825 thousand at the end of Q1 2022[27] - Total assets decreased to RMB 325,596,710 thousand as of March 31, 2023, from RMB 349,262,807 thousand as of December 31, 2022[25] - The company’s equity attributable to shareholders increased slightly to RMB 93,310,649 thousand as of March 31, 2023, from RMB 93,189,846 thousand as of December 31, 2022[26] Market Outlook - The company expects growth in retail credit empowerment despite current challenges in the market[23]